On Thursday, all three major indexes closed lower, with a sharp selloff in Alphabet dragging down the technology sector. At the same time, U.S. inflation accelerated, according to a report released Thursday by the Bureau of Economic Analysis showing that prices measured by the personal consumption expenditures price index rose 0.5% month over month in September and 3.6% year over year.
U.S. Stocks
At the close, the Dow Jones Industrial Average fell 132.54 points, or 0.25%, to 52,342.56; the S&P 500 dropped 23.68 points, or 0.31%, to 7,720.30; and the Nasdaq Composite slid 365.13 points, or 1.38%, to 26,184.72. Alphabet (GOOG.US) tumbled 12.6%, while Apple (AAPL.US) gained more than 1%. The Nasdaq Golden Dragon China Index rose 0.2%, while Alibaba (BABA.US) fell more than 1%.
European Stocks
Germany's DAX 30 rose 372.20 points, or 1.45%, to 26,076.22; the U.K.'s FTSE 100 added 31.78 points, or 0.30%, to 10,726.28; France's CAC 40 climbed 83.04 points, or 1.05%, to 7,970.00; the Euro Stoxx 50 gained 44.54 points, or 0.72%, to 6,212.35; Spain's IBEX 35 fell 30.81 points, or 0.16%, to 18,852.69; and Italy's FTSE MIB rose 193.20 points, or 0.39%, to 50,017.50.
Forex
The U.S. dollar index, which measures the greenback against six major currencies, fell 0.17% on the day and closed at 102.037 in late New York trading. As of late New York trading, the euro was at 1.1162 dollars, up from 1.1150 dollars the previous session; the British pound was at 1.3361 dollars, up from 1.3316 dollars; the dollar was at 157.96 yen, down from 158.05 yen; the dollar was at 0.8264 Swiss francs, down from 0.8290 Swiss francs; the dollar was at 1.3986 Canadian dollars, down from 1.4021 Canadian dollars; and the dollar was at 9.8608 Swedish kronor, down from 9.9139 Swedish kronor.
Cryptocurrencies
Bitcoin fell nearly 3% to 78,808 dollars as of press time, while Ethereum dropped more than 3.7% to 2,269 dollars. On the news front, cryptocurrency exchange Binance may have suffered a hack involving 2.77 billion dollars on Thursday. On-chain data showed funds flowing from the exchange's hot wallet to unconfirmed addresses across five blockchain networks. Binance founder and former CEO Changpeng Zhao posted on a social media platform that this was very likely a hack but stressed that user funds were safe. Following the transfers, stablecoin issuers Tether and Circle Internet Corp. (CRCL.US) froze 971 million dollars and 873 million dollars worth of stablecoins, respectively.
Precious Metals
Spot gold stood at the 4,021.3 dollar mark, while spot silver was at 52.156 dollars per ounce.
Crude Oil
On the New York Mercantile Exchange, light crude for December delivery fell 78 cents to settle at 102.00 dollars per barrel, a decline of 0.76%. London Brent crude for December delivery fell 44 cents to settle at 114.88 dollars per barrel, a drop of 0.38%.
Macro News
U.S. inflation is heating up again, with the cost of living emerging as a focal point ahead of the midterm elections. A inflation gauge closely watched by the Federal Reserve accelerated last month, indicating that prices remain elevated. With less than a week to go before the U.S. midterm elections, the cost of living and household affordability have become central campaign issues. The Commerce Department said Thursday that consumer prices rose 3.6% year over year in September, up from 3.4% in August, while prices rose 0.5% month over month, up from 0.3% in August and the highest since May. After the Iran war pushed up oil and gasoline prices, the annual U.S. inflation rate worsened further. U.S. oil prices remain above 100 dollars per barrel, compared with less than 70 dollars before the war. Polls show that the inflation rebound has left most voters dissatisfied with the economy and with President Trump's handling of rising living costs. Trump promised during his 2024 campaign to lower prices, including bringing gasoline below 2 dollars per gallon. The current national average U.S. gasoline price is about 4.25 dollars per gallon. Excluding volatile energy and food prices, inflation also accelerated.
U.S. economic growth accelerated in the third quarter, exceeding expectations, as strong consumer spending and AI-driven business investment offset the impact of higher oil prices caused by the Middle East conflict. Data released Thursday showed that third-quarter GDP grew at an annualized preliminary rate of 3.4% year over year. Economists surveyed by Reuters had expected GDP growth of 3.2%, with market forecasts ranging from 1.0% to 4.2%. The strong growth stands in sharp contrast to households' pessimistic outlook on the economy, reflected in Trump's record-low approval rating and a sharp deterioration in consumer confidence. The report was released less than a week before the U.S. midterm elections next Tuesday, which will determine control of Congress. The U.S. economy is currently growing noticeably faster than the roughly 2% pace that some Fed officials consider non-inflationary. The Fed on Wednesday kept its benchmark rate in the 3.75% to 4.00% range while acknowledging that inflation "remains elevated." Economists expect the Fed to raise rates in December. Fed Chairman Warsh told reporters: "Economic activity is expanding at a strong pace." He also noted: "While uncertainty remains, partly due to geopolitical developments, domestic spending has been resilient."
Qatar is buying LNG from the United States and elsewhere to hedge against Strait of Hormuz risks. Saad al-Kaabi, CEO of QatarEnergy and the country's minister of state for energy affairs, said Thursday that the company is purchasing long-term liquefied natural gas from the United States and other suppliers as part of a strategy to build a trading and arbitrage hedge mechanism that would generate revenue for QatarEnergy if exports through the Strait of Hormuz are disrupted in the future. Kaabi said: "If there is a scenario where the strait is closed, which is the real sudden risk we want to address, then gas prices will spike immediately. At that point, QatarEnergy would be able to earn revenue that would otherwise be impossible." Kaabi's remarks revealed Qatar's specific plans for the first time. As one of the world's largest LNG producers, Qatar hopes to make up for revenue losses caused by the Iran war and guard against future disruptions to shipping through the Strait of Hormuz.
The European Central Bank kept rates unchanged, while Lagarde's early departure deepened concerns about energy and the situation in France. The ECB held rates at 2.5%, in line with market expectations. At the same time, news that President Lagarde will leave early further heightened market worries about energy costs and France. On rate policy, the ECB chose to wait and see for now. Since the Iran war disrupted energy markets, the ECB has raised rates twice. Officials worry inflation could rise to twice the 2% target, but so far there is no sign that higher oil and gas prices are spilling over into other areas. Meanwhile, Europe's previously surprisingly resilient economic growth momentum is fading. Markets widely expect policymakers to raise rates again in December. At that time, the ECB will release updated economic projections to assess how severe inflationary pressures really are. The situation in France has exacerbated tighter financial conditions and is further dampening demand. Analysts expect the year-end hike to be the last of the ECB's current tightening cycle. However, investors are betting on two more hikes in 2027. Sources say ECB officials expect a December hike and then a pause. According to reports, three policymakers interviewed after the meeting said ECB officials expect to raise rates in December to counter energy-driven high inflation and then pause, as rising bond yields are expected to weigh on growth and curb inflation. The ECB kept rates unchanged Thursday as widely expected, with President Lagarde hinting at another hike in December and warning that high and rising energy costs are increasing inflation risks. They said that unless energy prices suddenly fall sharply, the ECB will almost certainly raise rates on December 17, lifting the deposit rate to 2.75%. However, they expect a pause after that. An ECB estimate circulating before Thursday's meeting showed that, compared with the September baseline forecast, recent increases in bond yields are expected to reduce cumulative economic growth by 100 basis points and lower inflation by 90 basis points during 2027-2028.
Company News
SanDisk Corp. (SNDK.US) reported first-quarter data center revenue up 61% quarter over quarter, and the stock will split 1-for-8. SanDisk Corp. (SNDK.US) reported fiscal 2027 first-quarter revenue of 11.03 billion dollars, versus market expectations of 10.68 billion dollars, and adjusted earnings per share of 49.51 dollars, versus expectations of 46.27 dollars. Data center revenue reached 4.8 billion dollars, up 61% quarter over quarter, mainly driven by demand for enterprise SSDs fueled by AI infrastructure buildout. The company said product demand is strong and continues to grow, with data center growth accelerating further. Driven by tight memory supply, the company was able to raise prices sharply, with first-quarter adjusted gross margin reaching 85.1%, up from 84.6% in the prior quarter. The company expects fiscal 2027 second-quarter revenue of 12.2 billion to 12.6 billion dollars, versus market expectations of about 12.3 billion dollars, and adjusted gross margin of 84.5% to 85.5%. SanDisk Corp. shares have risen more than 450% year to date, and the company will implement a 1-for-8 stock split on November 19.
Reddit plans to adjust its strategy and restrict access for users who are not logged in. Social forum platform Reddit (RDDT.US) said it plans to shift the user experience toward a logged-in account model to increase engagement and improve its advertising business, which continues to drive solid growth. CEO Steve Huffman announced Thursday that the company will eventually limit the amount of content unregistered users can access on the platform. Reddit plans to begin testing different approaches outside the United States in the fourth quarter. The strategy marks a major shift for Reddit, which for the past 20 years has allowed users to browse its forums without registering an account. COO Jen Wong acknowledged Thursday that the move could limit the platform's reach in the short term, but that over time it will create more growth opportunities. Reddit forecast Thursday that quarterly sales will exceed 1 billion dollars for the first time. However, although the company expects fourth-quarter revenue of 1.0 billion to 1.03 billion dollars, that outlook is below the Wall Street average estimate of 1.05 billion dollars.
Amazon.com sharply increased spending to meet AI service demand, with third-quarter capital expenditure exceeding 77 billion dollars. Amazon.com (AMZN.US) spent more than 77 billion dollars on property and equipment in the third quarter, far above analyst expectations, by about 20 billion dollars. The company is continuing to build data centers to meet growing demand for artificial intelligence services. That spending pushed free cash flow to negative 42.4 billion dollars. Amazon.com also reported revenue up 12% year over year to 201.9 billion dollars. Although sales growth at its cloud unit Amazon Web Services accelerated for a sixth straight quarter, signs of sluggish growth in its core online business also began to appear. Amazon.com also expanded data center capacity and improved its ability to provide computing power to enterprise customers. In July, Amazon.com said that due to supply constraints from tight memory chip availability, its 2026 capital expenditure could reach 220 billion dollars, higher than its previous forecast.
Intel's fourth-quarter guidance missed expectations, and the stock plunged 22% after hours. Intel (INTC.US) issued a revenue forecast below analyst expectations, citing a sharp decline in PC processor demand and the company's difficulty keeping up with surging demand for high-margin data center components. Intel said Thursday that fourth-quarter revenue is expected to be 15 billion to 16 billion dollars, while the analyst average estimate is 17 billion dollars, with some forecasts exceeding 18 billion dollars. Excluding certain items, the company expects quarterly earnings per share of 25 cents, while Wall Street expected adjusted earnings per share of 43 cents. Intel is facing a severe downturn in the PC market, and its important customers, laptop and desktop manufacturers, are currently struggling with memory chip shortages and soaring component prices. Speaking about the PC market, CEO Chen Liwu said: "Basically one of the main challenges is memory. Memory prices have risen sharply. I think by 2027 this will become a very serious problem for all of us. The entire market has been affected." Intel expects the PC market downturn to last at least through the first half of 2027, with an additional 10% decline next year after a 12% drop in 2026. After the earnings release, Intel plunged 22% after hours.
Anthropic contributed more than a third of SpaceX revenue, becoming its largest single customer. People familiar with the matter said Anthropic is SpaceX's (SPCX.US) largest single customer, contributing more than one-third of the company's revenue in the third quarter of 2026. A filing submitted by SpaceX last week showed that about 34.5% of revenue last quarter came from a customer buying computing power for its AI division, and people familiar with the matter confirmed that customer is Anthropic. Anthropic previously signed a computing power contract with SpaceX, with total spending of up to 120.5 billion dollars through 2029, and expected average monthly spending of about 3.1 billion dollars starting in December 2026. However, Anthropic can cancel the relevant contracts with 90 days' notice after January and March 2027, respectively. The report noted that SpaceX's revenue dependence on Anthropic highlights customer concentration risk in its AI computing power business; at the same time, the AI computing rental industry faces tightening financing pressure. Another major SpaceX customer in the third quarter was a related government agency, contributing 16.6% of revenue, while the U.S. federal government had previously been its largest single customer.
Analyst Ratings
Oppenheimer lowered its price target on Alphabet (GOOG.US) to 355 dollars from 440 dollars.
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